Transphobic Boss

This might be the wrong room, but it seems like the best fit to me (?)

I want to know who you all believe is in the wrong in this situation.

A person came into the movie theater, I recognized him from high school. In high school, he identified as his biological sex, which was female. But since, has made a Facebook post saying that he’s ready to come out and tell everyone that he would rather be a he. (I don’t know all the details as we weren’t close but i refer to him as he because that’s what he asked for in his post). So, he comes to my register and we chat for a minute or two until he goes into the game room to play. He comes back a few minutes later because a game ate his dollar, so I grabbed my manager to refund his dollar. I said “i have a customer out here who put a dollar in a game and he said it didn’t work” (those were my exact words).

She walks out with me and we approach the counter where the customer was left standing. She said, very loudly, “that’s not a guy!” and i said quietly “it’s okay, just give him his money” because I didn’t want to put him on the spot. Physically, he has some feminine qualities but also looks very masculine. And she would NOT DROP IT. She just kept saying “this is obviously a she” as she was giving him his money back. I felt like it’s not my place to discus his personal business with my boss, so I asked her again to just drop it and to stop. And she did, until he walked away. And I told her that he identifies as a he. She said “I don’t care, she looks like a she, she’s a she”. We argued for a minute about that before i was like “would it really be inconvenient for you to just call him what he is? Or anyone else for that matter” and she didn’t answer and left.

Should I have stood up for him better? He later messaged me on Facebook thanking me for respecting him but, I feel like i should have done more.

Was I wrong for not saying something more?